HSBC banks on legacy, connectivity as Singapore grows as a hub for wealth planning

HAVING a strong network and being globally connected are key to meeting current wealth management and legacy planning needs, with today's high net worth individuals (HNWIs) looking for long-term and wide-ranging solutions.

This puts Singapore's geographical location and its position as regional headquarters for many businesses at an advantage to become a regional wealth hub, notes Mary Chan, head of wealth planning and advisory in South-east Asia at HSBC Global Private Banking.

"Families are now looking for a one-stop shop that can continue to serve them from the first, to the second and third generations," Chan says.

Chan notes that global connectivity is even more pertinent today, given that families may now be spread across the globe.

For HSBC Global Private Banking, its global brand, and long history in establishing and maintaining trusts for both private and charitable purposes, allows it to stand out and meet the changing needs of its clients.

The private bank offers trust and fiduciary services in five locations across the globe - Singapore, Hong Kong, Jersey, New York and Delaware - and it also has wealth planning capabilities in nine locations including Singapore and Hong Kong.

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Chan, who is based in Singapore, notes that HSBC Global Private Banking is well-equipped to support its clients' wealth planning and trust needs not just locally, but also in other jurisdictions where their family members are based.

She says: "With Singapore's geographical advantage, business-friendly environment and high standards of education, international and regional family businesses favour Singapore as the base to deepen their presence in Asia for growth and also for their children's education and development."

Supporting Asia's generational wealth transfer

HNWIs and their families - which refers to those with a net worth of US$5 million or more - are expected to transfer US$18.3 trillion across generations by 2030, of which Asia will account for US$2.5 trillion, according to the Family Wealth Transfer 2021 report by wealth insights provider WealthX.

When it comes to establishing a trust, HSBC Global Private Banking found that HNWIs today want an enduring structure on top of banking or specific solutions on managing assets.

This comes as more individuals in high net worth families - particularly in the second generation - are becoming more actively involved and organised in managing their families' wealth.

HNWIs and their families are also more willing to turn to key professionals to map out a holistic plan for both the short and long term, giving rise to the need for tax advisors, lawyers, insurance specialists, bankers and trustees - the five key professions that are often involved in all aspects of wealth planning and transfer.

Chan says: "Nowadays, individuals and families are more diversified in assets and residencies, which is why an experienced professional advisor with a global presence like HSBC Global Private Banking is effective in handling their needs. When clients decide to invest in other jurisdictions or relocate their families elsewhere, they should always consult their wealth planners and professionals to ensure they have the right plan in place."

Reviewing plans to maintain their long-term feasibility

Noting that HSBC Trustee has over 75 years of history in Asia, Sharnika Silva, head of trust and fiduciary services in South-east Asia at HSBC Global Private Banking, points out three key points for a good wealth succession plan: "The first point is to never avoid discussing the issues; the second is to seek advice; and the third is to put in place that plan early."

Silva adds that it is necessary to regularly review the plan to make sure that it remains relevant, especially in today's fast-changing legal, tax and regulatory environment.

Though many successful entrepreneurs and wealth creators are good at growing their business and wealth, they may lack the experience in making succession plans despite their strong willingness to look after their loved ones, HSBC Global Private Banking notes.

The private bank supports that need by offering simple trust structures to very complicated, bespoke solutions depending on the family's needs.

This includes wealth planning solutions that extend across several generations, as well as properly-structured wealth plans that keep the core family assets together while allowing family members to look after their own wealth.

HSBC Global Private Banking has a family governance team, which helps families set up a family governance framework to build a common vision for the continuity of the family's wealth, values and business.

The private bank also offers estate and probate administration services for its clients, which is the legal process by which the assets of a deceased person are passed to his heirs and beneficiaries.

Silva, who is also based in Singapore, notes that HNWIs see the need for continuity when it comes to long-term wealth management and trust building solutions.

She says: "The families are willing to move and relocate their experts and their teams to settle in a country like Singapore because they can make long-term plans, as well as gain connectivity to other locations and access to infrastructure and technology, which are critical for relocation and expansion."

Catering for the need of the community

In addition to a wide range of financial, trust and insurance products for future planning, HSBC Global Private Banking also notes the importance of offering philanthropic solutions, given the rising number of HNWIs who are interested in contributing to society and leaving a legacy through giving back to the community.

Chan says HNW families and family offices are especially drawn to setting up trust or philanthropic structures in Singapore given the Republic's infrastructure, connectivity and regulatory framework.

The strong fundamentals are further supported by Singapore's aspiration to grow local and regional philanthropy, she notes.

Silva adds that Singapore is well-placed to meet the modern philanthropic goals of HNW families, given that philanthropy has become more targeted and impactful, with rising involvement from the HNWIs.

"It's no longer about just giving money - our clients are often involved in the end-to-end process, including determining who are the end beneficiaries," Silva says.

Looking ahead, Chan expects growth opportunities in Asia will boost wealth transfer activities. This should put HSBC Global Private Banking in a good position to attract clients in the region given its capabilities.

Silva also notes that Singapore's plan to grow as an international wealth hub bodes well for all players involved in the ecosystem.

"The stability, forward-thinking and targeted approach we have in Singapore makes us well-placed to move leaps and bounds from where we are, and it's going to happen in a systematic way," she says.

"The interest is not purely on just wealth planning; the interest is on making Singapore the hub. Wealth planning is a very directed and very important by-product of that, and we are benefiting from that influx."